A home for sale in Austin, Texas, in October, 2023.
Brandon Bell/Getty Images
The Sunbelt has seen its population conitnue to surge since hte pandemic hit in 2020. But now, it’s West Coasters who are increasingly moving south.These movers are disproportionately higher-income, a new Bank of America report found.
Southern and Southwestern American cities have welcomed a growing number of new residents for decades. As manufacturing hubs in the Rustbelt contracted, many Midwesterners found their way south to warmer climates in relatively affordable cities and suburbs.
But since the pandemic, a larger share of these new southerners are coming from West Coast cities with costly real estate, like San Francisco and Los Angeles, according to a new Bank of America report.
A disproportionate share of these movers are high-income and unmarried, the report found. Among nearly all of the 26 metro areas analyzed, at least 90% of moves in were single-person households. Among those moving from the West to the South, over 40% had income above $125,000.
“While different MSAs within the South are showing a more nuanced picture, the overall story appears to be that population growth in the region is slowing but still continuing,” the report notes. “But the same cannot be said of the West where, with the exception of Las Vegas, our data suggests populations in the MSAs we track are declining vs. a year earlier.”
Between April 2020 and July 2023, the South’s population increased by 3.9 million people, Census Bureau data shows. Cities in Florida and Georgia, and Texas cities like Austin and San Antonio, among many others, have seen big spikes in population. This has been primarily driven by domestic migration, with a smaller boost from international migration.
Meanwhile, the West is seeing its share of the US population decline for the first time since the 1940s. The West has seen a decline in domestic migration but increases in international migration and natural change — births minus deaths — since the 2020 census.
Bank of America’s analysis of migration to and from major metropolitan areas, using aggregated and anonymized internal customer data, reveals that San Francisco and Los Angeles had the largest year-over-year percentage decrease in population, while southern cities such as Austin, San Antonio, and Jacksonville had among the largest increases.
San Francisco, for instance, had a one percent year-over-year decrease in both the third and fourth quarters of 2023, while Los Angeles had 0.75% losses. Other Western cities such as Seattle, Portland, and San Diego also experienced losses. Las Vegas and Phoenix are the only Western cities Bank of America analyzed that had population increases compared to first quarter 2020.
To be sure, Bank of America noted how some southern cities in Texas in particular are experiencing some signs of slowing population growth. There has also been a slowdown in population growth in major Florida cities, even showing population declines over the last year in Miami and Orlando.
Housing costs are a major reason people are leaving West Coast cities for the Sunbelt. The median price of a home in San Francisco is $1.2 million, while the median price in Phoenix is $445,000 and $416,000 in Tampa. When the pandemic shut down offices and spurred a more permanent shift to remote work, many saw an opportunity to leave expensive real estate markets for more affordable homeownership in the South and Southwest.
“Where an MSA has a relatively high median mortgage payment, its population growth has usually been negative or at best weakly positive,” the report found. Meanwhile, metros with more affordable housing costs have seen stronger population growth.
The Bank of America researchers argued that the out-migration in West Coast cities will somewhat lessen the demand for housing there, while boosting demand in Sunbelt cities, and will ultimately help balance home prices across regions. But many Sunbelt cities have more permissive land-use and zoning regulations than their coastal counterparts, meaning they’re often better equipped to keep up with rising demand by building more homes. Both West Coast and Sunbelt cities that aggressively restrict housing construction will likely continue to face affordability crises.
Have you moved or are you considering a move from the West Coast to the Sunbelt? Reach out to these reporters at erelman@businessinsider.com and nsheidlower@businessinsider.com.